When you make an offer on a home in Pennsylvania, you’ll need to decide how you want to handle the mortgage contingency. This part of the Agreement of Sale determines whether your ability to get a loan will impact the sale—and how protected you are if financing falls through.
What Is a Mortgage Contingency?
A mortgage contingency protects buyers by making the purchase dependent on securing financing. If you apply for a mortgage in good faith and the loan is denied, this contingency typically allows you to terminate the contract and keep your deposit.
Your Three Options in the PA Agreement of Sale
1. Elect the Mortgage Contingency
Choose this if you’re getting a loan and want the protection that comes with it. If financing is denied, you may be able to walk away with your deposit refunded. This is the safest option for most buyers.
2. State You’re Paying Cash
Select this if you truly intend to buy the home without financing. There is no mortgage contingency, which makes your offer more competitive since the seller doesn’t have to worry about loan approval.
3. Waive the Mortgage Contingency
You can still apply for a mortgage, but the sale is not dependent on loan approval. If financing falls through, you’re still obligated to buy—or risk losing your deposit. Buyers usually choose this in competitive situations when they want to strengthen their offer.
Choosing the right option depends on your finances, your comfort with risk, and market conditions. If you’re preparing an offer, I can help you walk through each scenario and decide which strategy best positions you for success.